Microsoft is indeed developing a digital-media player to compete with Apple’s iPod, and there’s much more to the story.
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What’s being developed is actually a complete line of Xbox-branded digital-media products, including a device that plays media, a software media player and an online media service.

The project, or at least part of it, is referred to internally at Microsoft by the code name Argo — a reference to the huge warship used by the hero Jason in Greek mythology.

Argo is being developed within the Xbox group under the leadership of Xbox co-founder J Allard. His team includes people who previously worked on MSN Music, an online music service that had a promising debut in 2004 but fell victim to Microsoft’s dithering over its music strategy.

Now the company is firmly behind Argo. It has committed hundreds of millions to produce and market the devices.
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It’s a grand plan, but as with a few other big projects in Redmond, it may be a struggle to get it all done by the end of 2006. The project isn’t completed yet, the holidays are approaching fast and the team is under intense pressure to get everything absolutely right.

The timing of the hype cycle is perfect, however. Microsoft’s annual meeting with financial analysts is July 27, and it’s looking bleak.

More by following the link, but while the end of the year shopping season is approaching at a furious pace, July 27 seems a little soon to be spilling to the analysts. Dudley also asks the big question, “Can Xbox’s young guns get past the old guard with a less Windows-centric venture?” Looks like they already have. Now they have to deliver.